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20181097 Ver 2_Signed MBI_20201001DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 ROY COOPER Governor MICHAEL S. REGAN Secretary S. DANIEL SMITH Director TO: Danny Smith Director FROM: Katie Merritt NORTH CAROLINA Environmental Quality September 21, 2020 Nutrient Offse Xuffer Banking Coordinator l THROUGH: Paul Wojoski Supervisor - 401 & Buffer Permitting Branch SUBJECT: Division Approval of the RES Dogtown Mitigation Banking Instrument for Riparian Buffer Mitigation Credits in the Catawba Watershed for Environmental Banc and Exchange, LLC The attached final Mitigation Banking Instrument (MBI) between Environmental Banc and Exchange, LLC and the Division of Water Resources was placed on public notice and made available for public comments on September 4, 2020. The public comment period ended on September 18, 2020 and no comments were received on the draft MBI. DEQ Legal counsel assisted with and agrees with the final template for which all our MBI documents are drafted from. I have reviewed the attached MBI and it is ready for your approval. Please sign on page 15 and return the document to me for final execution. D E Qbi�� North Carolina Department of Environmental Quality I Division of Water Resources 512 North Salisbury Street 1 1611 Mail Service Center I Raleigh, North Carolina 27699-1611 vOry rN Cx:40:.itiA � o .—Io E�.w�����a�:r� /� 919.707.9000 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 AGREEMENT TO ESTABLISH THE RES DOGTOWN MITIGATION BANKING INSTRUMENT FOR RIPARIAN BUFFER MITIGATION CREDITS IN THE CATAWBA WATERSHED TABLE OF CONTENTS I. PREAMBLE....................................................................................................................... 2 II. LOCATION AND GEOGRAPHIC SERVICE AREA ...................................................... 2 III. AUTHORITIES.................................................................................................................. 3 IV. ESTABLISHMENT OF BANK PARCELS....................................................................... 3 V. BANK PARCEL DEVELOPMENT PACKAGE.............................................................. 4 VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL ................ 6 VII. CALCULATION OF MITIGATION CREDITS FOR THE BANK PARCEL ................. 9 VIII. CREDIT RELEASE SCHEDULE.................................................................................... 10 IX. PROCEDURE FOR DEBITING AND CREDITING...................................................... 11 X. BANK PARCEL CLOSURE............................................................................................ 12 XI. GENERAL PROVISIONS FOR THE BANK PARCEL ................................................. 12 ATTACHMENTS & REFERENCES Attachments A — Division of Water Resources Authority Document B — Buffer Ledger Template References 1 h 1 pter% DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 I. PREAMBLE This RES Dogtown Mitigation Banking Instrument ("Instrument") regarding the establishment, use, operation, and maintenance of the Dogtown Buffer Mitigation Bank Parcel (`Bank Parcel"), to provide Catawba River Basin Riparian Buffer mitigation credits ("Riparian Buffer Credits") is made and entered into by and among Environmental Banc and Exchange, LLC ("EBX") acting as the Bank Sponsor ("Sponsor"), and the North Carolina Department of Environmental Quality — Division of Water Resources ("DWR"). This Instrument is in accordance with the Consolidated Mitigation Rule 15A NCAC 02B .0295, which became effective on November 1, 2015, see references. The purpose of this Bank is: A. To restore and preserve riparian vegetation adjacent to mitigated intermittent and perennial streams in the Catawba watershed with the intent to improve water quality within the Catawba River Basin. B. To convert agricultural land uses within riparian areas adjacent to streams and ponds into a dense, hardwood vegetated state with the intent to significantly reduce nutrient loadings associated with agricultural practices into streams. C. To provide mitigation and sell any resulting Riparian Buffer Credits to third parties in the Catawba River Basin, for development (both existing and proposed) requiring such mitigation. II. LOCATION AND GEOGRAPHIC SERVICE AREA A. The Geographic Service Area ("GSA") is the designated area wherein a Bank can reasonably be expected to sell Riparian Buffer Credits for authorized impacts due to development activities. B. The GSA for this instrument is limited to the Catawba River mainstem below Lake James and along mainstem lakes from and including Lake James to the North Carolina and South Carolina border in the Catawba River Basin in accordance with 15A NCAC 02B .0614. C. Sale or transfer of Riparian Buffer Credits shall be limited to the GSA described in Item B of this Section unless otherwise authorized by the DWR or delegated local government in accordance with 15A NCAC 02B .0295. D. The following table provides site -specific details of the Bank Parcel proposed under this Instrument, which is within the Catawba Watershed; Table 1.0 — Site -specific Details Bank Parcel County 14-Digit USGS DWR Project # Project Named Receiving Primary Land Name HUC Catawba 0301/1/1 140010 2018-1097v2 Location Stream Use/s Dogtown 35.752292, Bakers Creek Agriculture and -81.187442 cattle pasture 2 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 III.AUTHORITIES A. The Bank will be used to provide Riparian Buffer Credit in accordance with the requirements in the DWR Authority document referenced herein as "Attachment A" and attached to this Instrument. B. Projects eligible for utilization of the credits are those requiring authorization under the requirements of Attachment A and any new approved North Carolina ("State") statutes and riles for the Catawba River Basin. C. The sale of mitigation credits generated from the Bank Parcel approved under this Instrument, shall be consistent with approved State statutes and rules for the Catawba River Basin. D. Mitigation activities proposed under this Instrument and corresponding Bank Parcel Development Packages (BPDP) to generate Riparian Buffer Credits shall be consistent with State statutes and rules for the Catawba River Basin that are in place at the time a complete BPDP is submitted to DWR. IV. ESTABLISHMENT OF BANK PARCELS A. In accordance with 15A NCAC 02B .0295, DWR has provided a "Site Viability Letter" for the Bank Parcel proposed under this Instrument. The site viability letter is not an approval of the site to generate riparian buffer credits or nutrient offset credits, but is a preliminary review of the Bank Parcel that details and confirms existing land -use conditions, defines the riparian sites (Enhancement, Restoration or Preservation), and identifies features (streams, ditches, ponds, etc.) that meet general criteria to be suitable to generate riparian buffer credits and nutrient offset credits. Table 2.0 below outlines when a Site Viability Letter was issued by DWR for the mitigation site proposed under this Instrument: Table 2.0 — Site Viability Letter Details Bank Parcel NC DWR Site Visit Viability Letter Received Viability Letter Expiration Date May 2, 2016 June 16, 2016 Dogtown March 9, 2017 April 18, 2017 None noted April 12. 2017 Aril 21, 2017 B. A valid Site Viability Letter is required prior to submittal of the BPDP. Site Viability Letters will either expire on the dates listed in the table above or upon the submittal of an individual As -Built Report to the DWR, whichever comes first. If the Site Viability Letter expires prior to submittal of a complete BPDP as described in Section V to DWR, then the Sponsor must submit a formal request to DWR for a new Site Viability Letter for that Bank Parcel. C. The Bank Parcel proposed for inclusion under this Instrument shall require a BPDP be submitted to, and approved by, the DWR prior to use of the individual Bank Parcel for mitigation purposes or for any sale or transfer of any associated credits. The contents of the BPDP are provided in Section V. 3 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 D. This Bank Parcel is slated to be developed in conjunction with the RES Catawba Umbrella Mitigation Bank, and the Dogtown Mitigation Site, United States Army Corps of Engineers (USACE) Action ID # SAW-2017-00608, for stream mitigation. The mitigation plan associated with this Bank Parcel has been submitted to the Interagency Review Team (IRT) for review and approval. E. The BPDP submitted under this instrument will be placed on public notice and made available for public commenting for 15 calendar days. F. Most of the Riparian Buffer Credits on this Bank Parcel will be generated along newly formed stream channels through old pond footprints and along restored stream channels that are proposed for stream mitigation. Stream Mitigation Plans will be submitted under the RES Catawba Umbrella Mitigation Bank referenced in "D" in this section. Additionally, all activities conducted within riparian areas for purposes of generating Riparian Buffer Credits will be conducted in concurrence with stream mitigation activities. Riparian Buffer Credit on the Bank Parcel may be achieved through riparian restoration and preservation adjacent to intermittent and perennial stream channels as allowed per 15A NCAC 02B .0295 (1), (n) and (o). Riparian Buffer Credits are only attainable if the width of the restoration site and preservation site is at least 20 feet as measured perpendicular and landward from top of steam banks. G. The Bank Parcel is intended to provide Catawba River Basin Riparian Buffer Credit as follows: 1. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295(b) adjacent to mitigated intermittent and perennial streams. 2. Maintaining a Preservation Site as defined in 15A NCAC 02B .0295(b) by placing a conservation easement around riparian areas along mitigated streams as allowed by 15A NCAC 02B .0295 (o). 3. Diffused flow will be maintained onsite to the maximum extent practicable. H. The Bank Parcel submitted for review under this Instrument is anticipated to begin stream mitigation construction in Winter 2020. V. BANK PARCEL DEVELOPMENT PACKAGE A. The Bank Parcel Development Package (BPDP) submitted under this Instrument shall be submitted to DWR for review and must be approved by DWR prior to any construction on the Bank Parcel. The BPDP must describe any changes that have occurred to the site between the date of the Site Viability Letter and the date the BPDP is submitted to DWR. The BPDP shall include detailed information consistent with the sections below concerning; 1) site location (14-digit HUC is required); 2) existing conditions with current photos; 3) proposed buffer mitigation activities including a detailed vegetation plan; 4) monitoring and maintenance plans; 5) financial assurances; 6) associated buffer mitigation calculations, which shall include credit generation, service area, and accounting as appropriate for each regulatory authority; 7) stream buffer determination letter from DWR, and 8) Site Viability Letter from DWR; 9) a figure depicting the proposed stream mitigation areas; and 10) service area figure for each mitigation type. 2 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 B. The Sponsor will obtain all applicable federal, state, and local documentation, permits, or authorizations needed to construct and maintain the Bank Parcel. This Instrument does not qualify as, or substitute for, such documentation, permit, or authorization. C. Any restoration activities or proposed construction within riparian areas on the Bank Parcel to produce Riparian Buffer Credit must be approved by DWR in writing prior to implementation. The failure of the Sponsor to comply with this requirement may result in a revised or reduced credit release schedule for the Bank Parcel. All restoration activities must be performed in concurrence with any stream mitigation activities and not before. D. Requests for deviation from the approved BPDP must be submitted to DWR in writing. Written approval from the DWR must be received prior to implementing any deviation from the approved BPDP. Property Disposition & Long -Term Management for the Bank Parcel E. Prior to the release of any credits, the Sponsor shall record permanent conservation easements at the Catawba County Register of Deeds' office that is sufficient to ensure protection, operation and maintenance of restored and preserved riparian areas for the duration specified in the approved BPDP. F. The form of the conservation easement shall be consistent with the standards employed by the State of North Carolina in the protection of restored riparian buffers and riparian areas and shall be approved by the DWR and USACE prior to the release of any credits. G. The Sponsor shall not grant additional easements, right of ways, or any other property interest in or to the project areas, without prior approval from the DWR and the USACE. H. The Sponsor agrees to transfer or assign the conservation easement and its interests in perpetuity to a qualified holder under NC General Statute ("GS") 121-34 et seq. and 170(h) of the Internal Revenue Code prior to the submittal of the Year 4 Monitoring Report. The holder shall be a land trust or stewardship program that will hold and enforce the conservation easement and the interests in perpetuity. The Sponsor shall choose a land trust or stewardship program that is accredited by the Land Trust Accreditation Commission and/or has been approved by DWR prior to the end of the fourth -year monitoring period. A land trust must be certified under 501(c)(3) of the Internal Revenue Code. In the event the Sponsor is also the owner of the underlying fee interest in the property, the conveyance of the conservation easement to a land trust or stewardship fund must be arranged at the outset of the approved BPDP. Financial Assurances for the Bank Parcel Following approval of the BPDP for the Bank Parcel, the Sponsor shall provide Performance/Maintenance Bonds from a surety company that is rated no less than an "A-" as rated by A.M. Best, to construct the sites according to the approved BPDPs. It is the Sponsor's 5 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 responsibility to confirm that the surety company is rated no less than an "A-" with each annual bond renewal. K. The amount of the Performance Bond shall be 100% of the estimated cost for implementation of the mitigation activities of the Bank Parcel as described in the approved BPDP. No bond shall be less than $150,000.00 to cover construction costs. L. Alternatively, in lieu of posting Performance Bonds, the Sponsor may elect to construct the projects prior to the first credit releases. M. For the Bank Parcel, once DWR has released all credits for completion of all the items listed below, then the Bank Sponsor will be released from its performance obligations under the performance bond required in Item J and K of this section: 1. Instrument and BPDP approved by DWR, Conservation Easement recorded, Financial Assurance posted; 2. Mitigation site earthwork and planting and installation of monitoring devices completed; 3. As -Built Report as described in Section VI has been received by DWR; and 4. DWR has submitted a written approval of the As -Built Report. N. To comply with this section, DWR must be the Obligee on all performance bonds. VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL As -Built Report A. The Sponsor agrees to perform all necessary work, in accordance with the provisions of this Instrument and corresponding BPDP, to establish, maintain, and monitor the riparian areas on the Bank Parcel until Item B(1) and (2) of Section X have been satisfied. B. When all stream mitigation activities have commenced, the Sponsor will submit an as -built plan and report for the Bank Parcel within 30 calendar days after completing the establishment of the riparian buffer mitigation areas. The as -built report will describe any deviation from the approved BPDP and will document the following: 1. Buffer restoration and planting details, invasive species control, confirmation of fence installation (if applicable), monitoring device locations, vegetation plot locations, photo point locations, surface and groundwater elevations, as appropriate. 2. Provide confirmation that the construction of all stream mitigation activities has been completed. Co DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 3. Boundary Survey of the conservation easement area, signed and sealed by a licensed surveyor, including an inventory of the final mitigation areas for riparian buffer mitigation credits in both square feet and acres. 4. As -built map of the mitigation area showing where riparian restoration and preservation was performed and any deviations to the Bank Parcel from what was approved in the BPDP. 5. As -Built map of the stream mitigation areas. 6. Aerial map of the mitigation area that was included in the approved BPDP. Financial Assurance for the Bank Parcel C. After completion of the restoration/construction on the Bank Parcel, a Performance/Maintenance Bond will be secured for 100% of the estimated cost to implement the monitoring and maintenance plan as described in the approved BPDP and As -Built Report applicable for the site. The Bond must be from a surety company that is rated no less than an "A-" as rated by A.M. Best, and it is the Sponsor's responsibility to confirm that the surety company is rated no less than an "A-" with annual bond renewals. D. A Performance/Maintenance Bond shall be secured each year for a minimum of five years, and until DWR has released all mitigation credits to the Bank Sponsor. Upon receiving written notification from DWR approving a monitoring report with no contingencies, the bond may be lowered by a maximum of 20% for that next year's monitoring based on the adjusted cost to complete the monitoring. No bond shall be less than $100,000 initially, to cover monitoring and maintenance costs. E. Once DWR has released 100% of all credits for completion of all Bank Parcel milestones described in Table 3.0 of Section VIII and in the corresponding BPDP, the Bank Sponsor will be released from its performance obligations under the performance bond required in C and D of this Section. F. To comply with this section, DWR must be the Obligee on all performance bonds. Monitoring and Maintenance Reports G. The Sponsor shall monitor the Bank Parcel as described in the BPDP until such time as DWR determines that the performance standards described below have been met. The monitoring period shall be a minimum of five consecutive years. H. Performance Standards for Vegetation: Native hardwood trees or native hardwood tree and shrub species should be planted at a density sufficient to provide 260 stems per acre after five years. A minimum of four (4) native hardwood trees or four (4) native hardwood tree and shrub species must be planted. No one species shall be greater than 50% of the planted stems. A list of species for planting will be detailed in the BPDP for approval. Native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. 7 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 A "stem" means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in height. If the performance standards of the vegetation are not met, supplemental plantings may be required. Supplemental plantings will be utilized until the required densities have been achieved and maintained for five years. Bank Parcel maintenance, such as ensuring diffuse flow, managing invasive species, and pest control will be included in the BPDP. K. Monitoring Reports for Riparian Buffer Credit: Reporting criteria of the vegetation shall be based on the Carolina Vegetation Survey (CVS) — EEP Protocol for Recording Vegetation Level 2 Plot Sampling only version 4.0 or any updated versions of this protocol in place on the date of acceptance of the BPDP. The Sponsor shall submit to the DWR an annual monitoring report no later than December 31 of each year for a minimum of five consecutive years after the first full growing season. This report will describe the conditions of the Bank Parcel, including an evaluation of the performance standards of the vegetation contained within the approved BPDP. Reports shall contain the following: 1. A U.S. Geological Survey map showing location of the Bank Parcel; 2. A detailed narrative with supporting photos summarizing the condition of the Bank Parcel along with any maintenance or remediation performed that year; and 3. A map, survey, or other figure showing locations of sampling plots, permanent photo points, location of transects, etc.; and 4. Monitoring data, including specific vegetative counts showing that the trees or tree and shrub species planted are meeting performance standards and updated photographs; and 5. A copy of the most recent Bank credit/debit ledgers; and 6. Corresponding verification letters from designated local governments upon request; and 7. Corresponding Mitigation Transfer Certificates upon request; and 8. Proof of performance bond renewal to cover the next monitoring year (if applicable) Contingency Plans/Remedial Actions L. In the event the Bank Parcel fails to achieve the performance criteria described in this Instrument and the approved BPDP, the Bank Sponsor shall develop necessary contingency plans in coordination with the DWR and implement appropriate remedial actions for the Bank Parcel and the Bank. Depending on the degree of remedial actions required, the DWR may modify the monitoring period. DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 VII. CALCULATION OF MITIGATION CREDITS FOR THE BANK PARCEL Riparian Buffer Credits A. All Riparian Buffer Credits shall be determined based on the ratios and percentages provided in 15A NCAC 02B .0295(m) and (n). B. Riparian buffer restoration on the Bank Parcel, as described in 15A NCAC 02B .0295(n) and (o)(3), and defined in 15A NCAC 02B .0295(b) may be used for Riparian Buffer Credit. C. Riparian buffer preservation on the Bank Parcel, as described in 15A NCAC 02B .0295 (o) and defined in 15A NCAC 02B .0295 (b), may be used for Riparian Buffer Credit. D. Riparian Buffer Credit is defined as one (1) buffer credit per one square foot or 43,560 buffer credits per one acre. 9 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 VIII. CREDIT RELEASE SCHEDULE A. Upon submittal of all appropriate documentation by the Sponsor, and subsequent approval by DWR, it is agreed that the riparian buffer credits associated with the Bank Parcel will become available for sale to a third party in accordance with the Credit Release Schedule below in Table 3.0. Table 3.0 - Credit Release Schedule for Riparian Buffer Credits % Credit % Credit Release Task Project Milestone Release within the Pond Footprints Instrument and BPDP Approved by DWR, Draft Stream Mitigation Plan No credits released I Approved by the IRT, Conservation Easement Recorded and Assigned 25 for areas within according to Item B (1) of Section X in this Instrument* and Financial pond footprints Assurance Posted Mitigation Site Earthwork, Planting and Installation of Monitoring Devices No credits released 2 Completed and all Applicable Permits Obtained 20 for areas within and oot rints 3 Monitoring Financial Assurance Posted and Approval of As -Built Report 10 55 4 Monitoring Report #1: Approved by the DWR** & financial assurance 10 10 renewed 5 Monitoring Report #2: Approved by the DWR** & financial assurance 10 10 renewed 6 Monitoring Report #3: Approved by the DWR** & financial assurance 10 10 renewed 7 Monitoring Report #4: Approved by the DWR** & financial assurance 5 5 renewed 8 Monitoring Report #5: Approved by the DWR** and final site visit by 10 10 DWR has been conducted Total 100% 100% * For specification, please see Section V in this Instrument ** DWR Approval provided upon a determination that the site is meeting performance standards contained within the approved BPDP B. DWR may modify the credit release schedules based on the information submitted or the order in which required information is received. DWR will notify the Sponsor of any modification to the credit release schedule. C. DWR may consider a Credit Release Schedule for a Bank Parcel based on the extent of change between current onsite conditions and proposed post construction conditions. D. The Sponsor must initiate implementation of the approved BPDP for the site under this Instrument in concurrence with all stream mitigation activities proposed in the approved Mitigation Plan referenced in Item D of Section IV of this Instrument. 10 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 IX. PROCEDURE FOR DEBITING AND CREDITING Credit Ledgers A. The Bank Sponsor shall maintain a credit ledger for the bank parcel under this Instrument: The credit ledger shall provide the accounting for Riparian Buffer Credit in square feet and acres. B. The credit ledger shall be submitted on a separate 8 `/2 inch by 11-inch spreadsheet with legible font style and font size. The ledger shall be submitted using the templates provided in Attachment B of this Instrument or any updated versions to these templates as provided by DWR. Credit Processing C. Riparian Buffer Credits generated on this Bank Parcel will be used to provide mitigation for authorized buffer impacts along the mainstem below Lake James and along mainstem lakes from and including Lake James to the North Carolina and South Carolina border in the Catawba River Basin according to 15A NCAC 02B .0614. D. The Bank Sponsor shall obtain written verification of buffer mitigation required from the delegated local government in the Catawba River Basin or DWR prior to debiting Riparian Buffer Credits from the individual Bank Parcel. E. All credit and debit transactions for the bank parcel under this Instrument shall be accurately depicted in the credit ledgers. The Bank Sponsor shall provide DWR up-to-date credit ledgers for the Bank by the tenth (10`h) of each month. At a minimum and upon request, DWR shall receive a hard copy of updated credit ledgers along with the corresponding Mitigation Credit Transfer Certificates and all corresponding letters from the designated or delegated local governments or DWR where applicable once a year. Notification of all credit sales shall be provided to DWR until all credits that have been released have been sold. Mitigation Credit Transfer Certificates F. All credit sales will include a Mitigation Credit Transfer Certificate ("Certificate") that is required to be provided to the buyer of Riparian Buffer credits, that will include, at a minimum, the following information: 1. Bank Details: (1) Bank Sponsor Name, (2) Bank Parcel as it appears in this Instrument, (3) DWR project number for the BPDP. 2. Credit Details: (1) date of receipt, (2) identify if full or partial payment, (3) amount of Riparian Buffer Credits purchased in square feet and the confirmation from DWR or the local government of the amount required. Permitted Project Details: (1) project name as it appears on DWR or local government permits and/or certifications, (2) 14-digit HUC, (3) river basin, (4) buffer protection rule applicable to the project, (5 — when applicable) designated local government requiring DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 Riparian Buffer Credits, and/or (6) DWR correspondence with project number requiring Riparian Buffer Credits for this project. G. If the DWR determines that the Bank is operating at a deficit (e.g. the Sponsor is closing on sales and/or transferring credit that is not available), or the Bank is selling credits out of compliance with statutes, rules or this Agreement, the sale/transfer of credits will immediately cease, and the DWR, in consultation with the Sponsor, will determine what remedial actions are necessary. X. BANK PARCEL CLOSURE A. Bank Parcel Closure shall be identified as the event when the Sponsor is relieved of all of its responsibilities to the Bank Parcel and there are no Riparian Buffer Credits left to sell. B. Bank Parcel Closure shall commence only after all of the following events have occurred: 1. Transfer or assign the conservation easement and all of its interests, in perpetuity, to a land trust or stewardship program as described in Section V of this Instrument. 2. All five years of monitoring completed, and all monitoring reports submitted and approved by DWR. 3. All credits have been released and debited and updated ledgers showing zero credit balances have been submitted and approved by DWR. XI. GENERAL PROVISIONS FOR THE BANK PARCEL A. Upon the presentation of proper credentials, and during normal business hours, the Sponsor and the landowner shall grant permission to the Director of DWR, or authorized representative of the Director of DWR, to enter the property containing the Bank Parcel. B. Amendments: This Banking Instrument may be amended or modified only with written approval of all signatory parties, including the USACE if it is applicable to the amendment. C. Any transfer of the Sponsor's rights or obligations outlined in this Instrument or any other agreement referenced in this Instrument to a third parry must be approved by DWR prior to the transfer. D. Force Majeure: After 100% of all of the credits have been released according to the credit release schedule in Section VIII and confirmation has been received by the DWR that the Conservation Easement has been successfully assigned in compliance with Item H of Section V, the Sponsor will not be responsible for Bank failure that is attributed to natural catastrophes including but not limited to flood, drought, disease, regional pest infestation, etc. that are beyond the control of the Sponsor. E. However, if an event occurs before 100% of all of the credits have been released according to the credit release schedule in Section VIII, then the Sponsor shall take remedial action to restore the property to its condition prior to the event, in a manner sufficient to provide adequate mitigation to cover 12 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 credits that were sold prior to the occurrence of the event. Such remedial action shall be taken by the Sponsor only to the extent necessary and appropriate, as determined by DWR and the Sponsor. DWR must concur in writing that a force majeure event has occurred for this provision to apply. F. Oversight: Actions taken by DWR may include, but are not limited to, the following: 1. Site visits, 2. Issuance of Site Viability Letters, 3. BPDP review and approval of items listed in Section V of this Instrument, 4. As -Built Report review, and approval of items listed in Section VI of this Instrument, 5. Monitoring Report review, and approval of items listed in Section VI of this Instrument, 6. Credit Ledger review and approval of items listed in Section IX of this Instrument, 7. Certificate review of items listed in Section IX of this Instrument and cross analysis to credit ledgers and, 8. Information requests, file reviews and audits Reports, ledgers, files and other information shall be made available to DWR upon request, unless otherwise specified in this or any other document. G. Validity of the Banking Instrument: This Instrument will become valid on the date of the last parry's signature. H. Specific Language of Banking Instrument Shall Be Controlling: To the extent that specific language in this document changes, modifies, or deletes terms and conditions contained in those documents that are incorporated into the Instrument by reference, and that are not legally binding, the specific language within the Instrument shall be controlling. I. Any disputes over decisions regarding this Instrument, shall be referred to the Director of DWR for a decision. The Director's decision is subject to review as provided in Articles 3 and 4 of G.S. 150B. J. This Agreement shall be binding upon the parties and is entered into knowingly, intelligently, and voluntarily. K. Notices: All notices and other communications which may be or are required to be given or made by any party to the other shall be in writing and shall be deemed to have been properly given and received on the date delivered in person or deposited in the United States mail, registered or 13 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 certified, electronic mail, return receipt requested, to the addresses set out below, or at such other addresses as specified by written notice delivered in accordance herewith. If to Bank Sponsor: Environmental Banc & Exchange, LLC Attention: Ms. Katie Webber 302 Jefferson Street Suite 110 Raleigh, North Carolina 27605 Katie Webber KWebber@res.us If to DWR: NC Division of Water Resources — 401 & Buffer Permitting Branch Attn: Nutrient Offset and Buffer Banking Coordinator 1617 Mail Service Center Raleigh, NC 27699-1617 14 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 L. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. ENVIRONMENTAL BANC & EXCHANGE, LLC By: Brad Breslow (Print) (Signature) Title: Regulatory Manager Date: 8/24/2020 NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY -DIVISION OF WATER RESOURCES By: Danny S. Smith (Print) (Signature) Title: Director, Division of Water Resources 9/30/2020 Date: 15 DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 Updated Nutrient Offset Program & Buffer Mitigation Program August 12, 2020 Authorities for Catawba MBI ATTACHMENT A Authorities pertaining to the Dogtown Mitigation Banking Instrument All Basins General Statutes: G.S. § 143-214.11 Ecosystem Enhancement Program G.S. § 143-214.26 Nutrient Offset Credits G.S. § 143-214.20-24 Riparian Buffer Protection Program G.S. § 143-214.7 Stormwater runoff rules and programs G.S. § 143-215.8B Basinwide Water Quality Management Plans Session Laws S.L. 2015-246 S.L. 2015-149 S.L.2014-90 S.L.2014-120 S.L.2013-413 S.L.2013-121 S.L.2013-265 S.L. 2012-200 (Amendment to G.S. §143-214.23 and G.S. §143-215.1) S.L. 2011-343 (Amendment to G.S. §143-214.11) S.L. 2009- 337 (Amendment to G.S. § 143-214.11) Administrative Rules: 15A NCAC 02B .0202 Definitions 15A NCAC 02B .0223 Nutrient Sensitive Waters 15A NCAC 02B .0295 Mitigation Program Requirements for Protection and Maintenance of Riparian Buffers Catawba River Basin Buffer Session Laws S.L. 2019-86 (Amendment to G.S. § 143-214.26) S.L. 2011-394 S.L. 1999-329 (part of G.S. §143B-282) Administrative Rules: 15A NCAC 02B .0610 Managing Activities within Riparian Buffers: Definitions 15A NCAC 02B .0611 Managing Activities within Riparian Buffers: Authorization Certificates 15A NCAC 02B .0612 Managing Activities within Riparian Buffers: Forest Harvesting Requirements 15A NCAC 02B .0614 Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0715 Delegation of Authority for the Protection and Maintenance of Existing Riparian Buffers DocuSign Envelope ID: C6580047-982B-4ED0-9A89-52BA73C64D21 Attachment B *Credits shown below are only for mitigation credits approved by the MBI, BPDP, and As -Built. (Sponsor Name & Instrument Name) (Parcel Name w/ HUC #) Buffer Credit Ledger Date Last Updated: DWR Bank Parcel Project #: Total Credits Released To Date: Sale/ Purchaser Name or % of Credits Credits Debited/Sold Project w/ 14 Digit HUC Released/Available to Buffer Credit Balance Local Gov't Release Date Credit Release Bank From Bank Square Feet Acres Square Feet Acres SquareAcres Feet